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Bitcoin Arbitrage Yields Shrink as Institutions Pull Back

By bitcoin.com
Jan 23, 2026
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Wall Street Retreats From Bitcoin’s Once-Lucrative Basis Trade
FAQ What is the Bitcoin cash-and-carry (basis) trade? It’s an arbitrage strategy where investors buy spot bitcoin and sell futures to earn the price spread. Why is the basis trade becoming less attractive?Bitcoin futures spreads have compressed, cutting annualized yields to around 5% from roughly 17% last year. How has this shift affected derivatives markets? CME bitcoin futures open interest has dropped sharply as institutions reduce basis trades and rotate strategies. What are traders doing instead of Bitcoin arbitrage? Institutions are moving toward options, hedging, and other crypto assets like ether, XRP, and solana.
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